Supreme Court rules on BAA monopoly

The British Airports Authority’s (BAA) monopoly over UK aviation looks set to be broken, after the Supreme Court ruled that London Stansted and one of either Edinburgh or Glasgow airports must be sold to increase competition in the industry.

Nearly three years ago, the Competition Commission demanded that the BAA relinquish its hold on three of its British airports, citing a need to “kick-start” airport-to-airport rivalry. Christopher Clarke, head of the commission’s investigation into the BAA, said that there was “no competition at all” between UK hubs in March 2009. Nine months later, in December, the BAA-owned Gatwick Airport was sold to investment firm, Global Infrastructure Partners.

The BAA was suspicious. The aviation giant complained of “apparent bias” in the sale of the Crawley hub, given that a member of the Competition Commission, Peter Moizer, was involved with one of the BAA’s biggest rivals, Manchester Airports Group (MAG). The Competition Appeals Tribunal upheld the appeal, and any further sales were suspended.

In October 2010, the saga came full circle, when the Court of Appeal ruled in favour of the Competition Commission, and overturned the BAA’s appeal of the previous year. The BAA remains adamant, however, that the circumstances that led to the order to sell in 2009 are no longer valid, citing the government’s refusal to consider any runway expansions in the southeast as a new variable in the case.

The Supreme Court refused to hear the BAA’s latest plea in February 2011, consigning Stansted and one of the Scottish airports to the saleroom. The remaining BAA-owned hubs, Aberdeen, Southampton, and Heathrow, remain unaffected, but the news of the Supreme Court ruling will come as a blow to the company. The number of airports under direct BAA control could be reduced to four within the next few years, down from seven in 2009.

In the UK, the BAA’s biggest competitors are Peel Airports, with three hubs, including Liverpool John Lennon, and MAG, with four. MAG currently owns Manchester, East Midlands, Humberside, and Bournemouth airports.

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